The IMF is finally calling out the eurozone and the ECB on their handling of the Greek debt crisis. The northern eurozone, led by Germany, does not want to pay more money to bailout Greece; therefore, it is maintaining the delusion that returning Greece to growth is a matter of the proper mixture of reforms and budget cuts.
The IMF recognizes that the budget cuts are part of the problem causing Greece to continuously miss its deficit forecasts since the onset of the crisis. As part of the troika, the IMF agreed to loan Greece money in order to assist it in attaining a 120% debt to GDP ratio by 2020, but now it realizes that Greece has no chance of reaching this goal.
Since the IMF cannot loan money to a country which cannot attain a sustainable debt load, it wants the eurozone countries to write off about €50bn before it will agree to additional loan disbursements.
Greece will run out of money sometime in November without the loan. If the IMF sticks to its guns, Europe will have to choose between either an additional haircut on the Greek debt it holds or a Greek default.
The brinkmanship has begun.